internal rate of control
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You are evaluating purchasing the rights to a project that will generate after tax expected cash flows of $90,000 at the end of each of the next five years, plus an additional $1,000,000 at the end of the fifth year as the final cash flow. You can purchase this project for $950,000. At this price, what rate of return would you earn on the investment (ask what is the internal rate of return)?
a. 10.3%
b. 7.7%
c. 9.6%
d. 52.6% ((90*5+1000)/950 -1)
e. 15%
f. insufficient information to estimate a return rate
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You are evaluating purchasing the rights to a project that will generate after tax expected cash flows of $90,000 at the end of each of ...
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